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Panel upholds $21K fine, suspension for Edmonton real estate agent who admitted to fraud
A RECA hearing panel fined Ali Merchant $21,000 and suspended him for a year after finding he breached the Real Estate Act on several occasions.
EDMONTON -- A former Edmonton real estate agent who was fined $21,000 and suspended for one year by the Real Estate Council of Alberta has lost his efforts to stay those penalties.
Mehboob Ali Merchant was seeking to stay the fine and suspension until his appeal date, tentatively set for March 17, 2020.
But in a Jan. 29 written decision, a three-person RECA hearing panel denied his application, noting Merchant had admitted to theft, fraud, identity fraud and withholding documents from investigators.
“Allowing Mr. Merchant to continue to work as an industry member given these serious breaches that have already been committed will place the public at unnecessary risk and bring the industry into disrepute,” reads the decision.
In seeking the stay, Merchant argued that being unable to work was causing him “irreparable harm” that outweighed any harm to the public should he be allowed to return to work.
Merchant, an 11-year veteran of the real estate industry, did not respond to phone and text messages from CTV News. He declined to comment on multiple occasions over November and December of 2019 in reaction to RECA’s initial ruling.
As per its policy on individual cases, RECA declined further comment on the decision.
LIFETIME BAN SOUGHT
Last October, a RECA hearing panel found Merchant leased a condo without permission, mishandled a commission, and withheld documents from investigators.
Merchant appealed the discipline, seeking lighter penalties, arguing the wrong section of the Real Estate Act had been applied. RECA counter-appealed, and sought a lifetime ban against him.
“Had it not been for these errors, the Hearing Panel would have imposed the proper sanction of licence cancellation and lifetime licensing prohibition.”
Merchant worked under the name Ali Merchant in Edmonton with the Century 21 Platinum Realty company but is no longer listed on its website.
'THIS IS THEFT'
Merchant’s case stretches back to February of 2011, when he received $20,000 from his client to be paid as commission on the condo’s purchase contract.
The RECA decision states that he instead deposited those trust funds into his own bank account.
“This breach was a crime of knowing deception and proven dishonesty,” argued RECA’s case presenter. “He never gave it to his brokerage. This is theft.”
Merchant cited his industry inexperience at the time and called the deposit “a clerical oversight” which he said “can simply be dealt with administratively.”
“I did pay all applicable fees charged by my brokerage, and thereby, did not commit any theft,” Merchant argued as per the RECA decision.
LEASE DEAL CONFUSION
Four years later, the same condo (and owner) were at the centre of another incident involving Merchant in January of 2015.
According to the RECA decision, Merchant attempted to enter into a lease with the condo owner on the understanding he was acting on behalf of his brokerage.
In actuality, the tenant was a corporation Merchant had registered to appear to be his brokerage.
“He did this for the purpose of personally profiting and thereby committed identity fraud,” the decision reads.
While admitting his actions were reckless, Merchant argued the corporation was registered by his wife to handle her private real estate portfolio.
“It was not my corporation and I have never had any positions or rights to this corporation.”
RENTED WITHOUT PERMISSION
The next month, Merchant rented out the condo to a tenant, but did so without the owner’s permission and without telling that tenant he wasn’t authorized to lease the property, according to the RECA decision.
“This cost [the tenant] money because she had to move early and unexpectedly. This cost [the owner] money because she was deprived of the lawful use of her own property.”
The decision notes Merchant offered to pay the owner back but also that it was less than what he collected and the gesture came only after he was under investigation.
“[Merchant] unlawfully collected rent from [the tenant], which he kept for himself. This is fraud.”
Merchant argued he never told the tenant that he owned the condo but that he didn’t share with her the written agreement he had with the condo’s owner
“This was reckless on my part but not fraudulent.”
In April of 2015, the owner filed a formal complaint with RECA, sparking an investigation in which Merchant was accused of withholding evidence.
“RECA investigators asked Mr. Merchant multiple times to provide a copy of the lease with GC and copies of all correspondence in regard to that lease,” reads the decision.
“He intentionally withheld these documents.”
Merchant stated the documents were not in his possession when asked for them and that they were later recovered from the tenant by investigators.
Pending the outcome of the appeal, his suspension ends on Oct. 17, 2020.